Over the years, New Democrats frequently have clashed with organized labor. We've strenuously opposed labor's retrograde agenda for trade protection as well as its attempts to thwart long-overdue reforms in America's underperforming public-sector systems, from welfare to job training to schools.

New Democrats also have clashed with labor on the broader question of how Democrats can become America's majority party. We've had the temerity to state the obvious: The depletion of labor's ranks has undercut its claim to speak for working Americans as a whole. And when labor has behaved like a special interest group, we've said so.

Our differences are serious. But we have never believed that conflict between New Democrats and organized labor is immutable or irreconcilable. On the contrary, we believe a reinvigorated labor movement can and should play a vital part in shaping a new progressive politics for America in the Information Age.

New Democrats acknowledge and honor labor's role in many of this past century's great achievements. First among them, of course, was labor's defense of wage earners' rights in factories, mines, and mills. Later, during the great postwar boom, labor showed that better wages, benefits, and education for working people not only are consistent with long-term economic growth, but that they are a prerequisite for progress. From the New Deal to the civil rights movement, labor was an early and pivotal supporter of progressive initiatives. Internationally, American unions staunchly supported democratic opponents of communism.

But in recent decades, powerful economic forces have shrunk employment in heavily unionized industries, undercutting labor's ability to offer its members secure jobs with rising pay and benefits. Union membership has tumbled everywhere except in the public sector, which is more insulated from the forces reshaping economic life.

With notable exceptions -- some of which are highlighted in this issue -- the U.S. labor movement has failed to respond effectively to these economic changes. Instead, many union leaders have hunkered down, hoping to stop or stem the restructuring of our economy and the modernization of our public institutions. This is why union leaders resist deeper U.S. integration in global markets, even at the cost of denying all Americans the economic benefits of open and expanding trade. This is why they cling to a nostalgic view of union militancy, even as the New Economy redefines economic security in terms of empowering individuals to hone their skills, collaborate in flexible workplaces, and control health and pensions and other key resources.

Organized labor's attempts to win political influence by boosting campaign spending is unlikely to compensate for its weakness in the economy. Moreover, the union hierarchy too often seeks political allies among left-wing activists and pressure groups, whose causes find little support among rank-and-file union members.

In the end, labor must confront its core dilemma: Working Americans struggling to adapt to a New Economy characterized by dispersed economic power, job churning, knowledge-intensive work, flexible organizations, and global integration see little relevance in traditional unionism.

Yet nothing in the New Economy renders the idea of labor unions obsolete.

In fact, in today's volatile global marketplace many workers may well need mutual aid organizations more than ever. For example, unions certainly are right in saying that the globalization of capital has aggravated the imbalance of power between employers, who can move, and workers, who mostly can't. Declining wages for low-skilled workers, the dramatic rise in part-time work, the inability of wage earners to have the same control over pension, health, and other benefits that top executives typically do -- all this suggests fertile ground for organizations dedicated to advancing the interests of average working families. And with Republicans wedded more than ever to economic theories that attribute all human progress to the contributions of capital, Democrats and the nation clearly need strong countervailing organizations that champion the contributions of labor.

In short, the New Economy calls for a new unionism. This isn't the first time labor has been challenged to change. Rapid industrialization posed a life-or-death threat to the craft unions of the original American Federation of Labor. Anyone who believes the emergence of the industrial unionism of the Congress of Industrial Organizations was a welcome development for the AFL needs a refresher course in history.

How might U.S. unions reinvent themselves for the Information Age? The first step is to understand why labor's ranks are dwindling. In January, the Bureau of Labor Statistics reported that the proportion of American workers who are union members declined to 14.1 percent of the work force, down from 14.5 percent in 1996 and its lowest point in four decades. Without the growth of government-sector unionism, the labor movement would have slipped further. In the private sector, not even one in 10 workers carries a union card.

What happened? As Stephen A. Herzenberg, John A. Alic, and Howard Wial point out in the lead story in this issue's cover package (page 8), "international competition, deregulation, and new technologies have undermined the stable oligopolies and regulated monopolies within which unions prospered. The growth of the service sector, in which unions never represented more than a small fraction of workers, hastened their decline."

In sum, while the American economy has changed dramatically in the past two decades, unions haven't. The challenge for today's AFL-CIO is to get smarter, not more militant. Organized labor needs both brains and brawn to succeed in the 21st century.

Change won't come easily. The American model of labor relations is adversarial, built on a foundation of mistrust between management and workers. The New Economy paradigm blurs those distinctions and stresses flexibility and partnership. "The days of just fighting with employers and saying they're doing the wrong thing are over," says Tom Lesch, a Machinist Union official who serves as an officer of the Wisconsin Regional Training Partnership, one of the nation's most innovative union-business collaborations (see story, page 18).

Some union visionaries foresee the next generation of unions organizing across company lines -- an Information Age version of the hiring hall -- and serving as the foundation upon which members build economic security. Under this intriguing scenario, one can begin to see the union of the future taking shape. It not only bargains with employers over wage and workplace issues and serves as a guarantor of high-quality workmanship, it also functions as an employment agency, benefit provider, and life-long learning coordinator.

Ultimately, the only way organized labor can reverse its decline is to carve out a new and valued role for itself in the private-sector economy. We don't know exactly how this will happen. But the articles in this magazine suggest the answer lies not in greater political activism, but in being attentive to workers' changing needs.

Despite our present differences, New Democrats would welcome a reinvigorated labor movement that worked with, rather than against, the currents of economic change. If that happened, new labor and New Democrats could together become the core of a new progressive majority based on helping workers adapt to -- and get their fair share of rewards from -- the New Economy.